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Carbon pricing in Canada is implemented either as a regulatory fee or tax levied on the carbon content of fuels at the Canadian provincial, territorial or federal level. Provinces and territories of Canada are allowed to create their own system of carbon pricing as long as they comply with the minimum requirements set by the federal government; individual provinces and territories thus may have a higher tax than the federally mandated one but not a lower one. Currently, all provinces and territories are subject to a carbon pricing mechanism, either by an in-province program or by one of two federal programs. [1] As of April 2024 [update] , the federal minimum tax was set at CA$80 per tonne of CO2 equivalent, set to increase to CA$170 in 2030. [2] [3]
In the absence of a provincial system, or in provinces and territories whose carbon pricing system does not meet federal requirements, a regulatory fee is implemented by the federal Greenhouse Gas Pollution Pricing Act (GHGPPA), which passed in December 2018. In provinces where the fee is levied, 90% of the revenues are returned to tax-payers. [4]
The carbon tax is levied because of a need to combat climate change, which resulted in federal commitments to the Paris Agreement. According to NASA's Jet Propulsion Laboratory (JPL), the air today contains 400 ppm of CO2 while the CO2 level average over the past 400,000 years was between 200 ppm and 280 ppm. [5] [6]
Saskatchewan never had a carbon pricing system and other provinces—Manitoba, Ontario, New Brunswick, and Alberta—have opted out of previous provincial carbon tax systems. Revenue from the federal GHGPPA, which came into effect in April 2019, is redistributed to the provinces, either through tax credits to individual residents or to businesses and organizations that are affected by the tax but are unable to pass on the cost by raising consumer prices. [7] [4]
The introduction of the tax was met with political resistance, mainly by the Conservative Party of Canada which attempted to "make the carbon tax the single issue" of the 2019 federal election campaign. [8] This argument did not succeed, as the Canadian voting public supported parties that also supported the carbon tax, leading CBC News to declare Canada's carbon tax to be "the big election winner" and "the only landslide victor" in this election. [9] Similarly, legal challenges to the law failed on March 25, 2021, when the Supreme Court of Canada rejected the 2019 appeal of the provinces of Manitoba, Ontario, Alberta, and Saskatchewan, ruling in Reference re Greenhouse Gas Pollution Pricing Act that GHGPPA was constitutional. [10]
In 2003, Alberta signaled its commitment to manage greenhouse gas emissions by passing the Climate Change and Emissions Management Act. One of the first actions taken under this legislation was to develop a mandatory reporting program for large emitters in Alberta.
In March 2007, Alberta passed Specified Gas Emitters Regulation. The first compliance cycle was from July 1 to December 31, 2007. [11]
In June 2007, Quebec implemented the first carbon tax in Canada which was expected to generate $2 million annually. [12]
On December 11, 2008, ExxonMobil CEO Rex Tillerson said that a carbon tax is preferable to a cap-and-trade program which "inevitably introduces unnecessary cost and complexity". A carbon tax is "a more direct, more transparent and more effective approach". Tillerson added that he hoped that the revenues from a carbon tax would be used to lower other taxes so as to be revenue neutral. [13]
An unpopular revenue-neutral carbon tax was proposed in 2008 during the Canadian federal election, by Stéphane Dion, then leader of the Liberal Party. It was Dion's main platform and it allegedly contributed to the defeat of the Liberal Party with its worst share of the popular vote in the country's history. [14] [15] [16]
The Conservative party, who won the 2008 election, had promised to implement a North American-wide cap-and-trade system for greenhouse gases. [17] During the 2008 Canadian federal election, the Conservative party promised to develop and implement greenhouse gas emissions trading by 2015, also known as cap and trade, that encourage a certain type of behaviour through economic incentives regarding the control of emissions and pollution. [18] [17]
In 2014, public policy economists and superannuated politicians came together to begin discussions on what would become the Canada's Ecofiscal Commission. The Commission was established with the participation of Paul Martin, Jim Dinning, Preston Manning, and Jack Mintz on November 4, 2014, [19] and became the leading advocacy group in Canada for carbon pricing. [20] They published reports in 2015, [21] 2016, [22] and 2017. [23]
In February 2015, Justin Trudeau announced that he would impose carbon pricing if elected. The proposed system would resemble the medicare model in which provinces would design systems suitable for their needs with the federal government setting national targets and enforcing principles. [24]
The Paris Agreement (French : Accord de Paris) [25] is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC), dealing with greenhouse-gas-emissions mitigation, adaptation, and finance, signed in 2016. The agreement's language was negotiated by representatives of 196 state parties at the 21st Conference of the Parties of the UNFCCC in Le Bourget, near Paris, France, and adopted by consensus on 12 December 2015. [26] [27] Under the Paris Agreement, each country must determine, plan, and regularly report on the contribution that it undertakes to mitigate global warming. [28] No mechanism forces [29] a country to set a specific target by a specific date. [30]
A special report by The Guardian in partnership with Climate Action Tracker, compared pledges made by some 200 countries that participated in the 2015 United Nations round of talks on a "new climate deal" hosted in Paris. [31] The co-authors wrote an in-depth analysis of 14 key countries and blocs, including Canada. The article, which summarized the report, said that Canada climate targets were the "weakest ... of any major industrialised economy which experts say was a "direct result" of Stephen Harper government's hard line policies" and its "promotion" of the "vast reserves of tar sands in Alberta" that are highly polluting". [32]
By December 2016, the ten provinces and the Canadian government presented their "executive, mitigation and adaptation" strategies towards a clean economy. [33] The "extensive document"—"Pan-Canadian Framework on Clean Growth and Climate Change"—"lean[-ed] heavily on carbon pricing". [23]
In 2018, Canada passed the GHGPPA, implementing a revenue-neutral carbon tax starting in 2019, [34] [35] which applies only to provinces whose carbon pricing systems created for their jurisdictions did not meet federal requirements. [35] Revenue from the carbon tax was to be redistributed to the provinces. [35]
According to a report by the Canadian Chamber of Commerce (CCC) released on December 13, 2018, Canada's largest business group endorsed the carbon pricing introduced by the federal government [36] saying it offers flexibility and is the "most efficient way to cut emissions" [37] and "solidly backs carbon pricing." [38] According to a December 13 CTV News article, Stewart Elgie, from the Ottawa-based Environment Institute at the University of Ottawa, the CCC's "endorsement of the carbon tax as the most efficient emissions-cutting tool" and its support of "Canada's investments in clean technology at home and abroad", provides the Canadian economy with a "major opportunity...to market itself in a low-carbon future". [36]
In December 2018, the Senate Committee on Agriculture and Forestry submitted their report based on a year-long study on the "impacts of climate change and carbon pricing on agriculture, agri-food and forestry". [39] Although some witnesses raised concerns that Canada's international competitiveness could be diminished compared with producers "who do not bear these additional, carbon-related costs". The Committee noted that a "study of the effects of British Columbia's carbon tax — which launched in 2008 — suggested the province's international competitiveness was not diminished". [39] : 10 The report recommended that Environment and Climate Change Canada, formerly known as Environment Canada, or EC consider exemptions for agricultural activities under the GHGPPA, with "special attention to competitiveness for producers and food affordability for Canadians". The Committee recommended exempting fuels used for heating or transportation in farming activities. [39] : 10
The Parliament of Canada passed the Greenhouse Gas Pollution Pricing Act (GHGPPA) [40] in the fall of 2018 under Bill C-74. [41] [42] The GHGPPA refers to charge or pricing instead of taxation. The charge which will rise to $50 per tonne of CO2 by 2022, begins at CA$20 in 2019 [43] and increases by CA$10 per year until 2022. Through the GHGPPA, provinces have the flexibility to create their own solutions to deal with GHG emissions in their own jurisdictions. Through the GHGPPA all provinces are required to place a minimum price of CA$20 a tonne of GHG emissions by January 1, 2019. [44] The tax will be retroactive to January. [45] The tax has increased to CA$30 in 2020 and to CA$40 per tonne as of April 2021. [46]
The federal government plans to send an annual rebate ranging from $300 to 600 adequate emissions pricing plans. [45] For example, if a family of 4 in Ontario pays CA$20 per month extra for gas, home heating and other costs, that same family will receive CA$307 in annual rebates. Compared to the CA$240 in costs, the GHGPPA should leave them CA$67 better off in 2019. The rebate benefit increases each year as the carbon price and the rebate both gradually rise. [47] Taxpayers had to request the Climate Action Incentive Payment (CAIP) rebate on their annual income tax return until filing their 2021 tax return, from which time eligibility for the rebate is automatic and the taxpayer sent a cheque or a direct deposit is made into their bank account. [48]
In her October 23, 2018 Power & Politics podcast, Vassy Kapelos interviewed Dominic LeBlanc, the Minister of Intergovernmental Affairs, Northern Affairs and Internal Trade, Saskatchewan Premier Scott Moe, and Ontario Minister of Environment Rod Phillips. [49]
Carbon pricing in Canada is forecast by Environment Canada to remove 50-60 MT of emissions from the air annually by 2022, which represents about 12% of all Canadian emissions. However, Canada needs to reduce emissions to 512 MT by 2030 to meet its Paris Climate Change accord. This would mean reducing annual emissions by about 200MT from the 2018 levels. In addition to carbon pricing, the government is pursuing a range of additional policies including improving fuel standards, energy efficiency, and closing coal plants. [50]
A May 22, 2018 report by the Parliamentary Budget Officer (OFC) showed that carbon pricing would have at most a minor impact on the economy, with an increase in GDP in 2022 of about CA$2 billion, or 0.1% of GDP. [51] : 5
According to a 2018 report, British Columbia, which has had a carbon price since 2008, had the fastest growing economy in Canada. [52]
In their April 25, 2019 report, Canada's Parliamentary Budget Officer estimated that the federal government "will generate CA$2.63 billion in carbon pricing revenues in 2019-20." [53] : 1 The report said that the "vast majority of revenues (CA$2.43 billion) will be generated through the fuel charge; the balance, roughly CA$197 million, will be generated by output-based pricing." [53] : 1 According to the PBO report, there will be an estimated increase in carbon pricing revenues of CA$6.20 billion by 2023-24.—CA$5.77 billion from the fuel charge proceed and the rest from the OBPS [53] : 1 —a "trading system for large industry, known as the output-based pricing system (OBPS)". [53] : 16
"The federal government has stated that the carbon pricing system will be revenue neutral; any revenues generated under the system will be returned to the province or territory in which they are generated. Households will receive 90 per cent of the revenues raised. The remaining 10 per cent will go to support particularly affected sectors, including small businesses, schools, and hospitals. Based on this assumption, 80% of households will receive higher transfers than the amount paid in direct and indirect costs. The net benefits are broadly progressive by income group: lower-income households will receive larger net transfers than higher-income households."
— "Fiscal and Distributional Analysis of the Federal Carbon Pricing System". Parliamentary Budget Officer (OFC). April 25, 2019. p.3.
However, the Canadian Revenue Agency has declared that, as of June 3, 2019, the average payment to households was less than previously estimated. It amounted to CA$174 in New Brunswick, CA$203 in Ontario, CA$231 in Manitoba and CA$422 in Saskatchewan. [54]
In 2019, the provinces of Manitoba, Ontario, Saskatchewan brought their case to the Supreme Court of Canada. On March 25, 2021, the justices rejected their appeal, ruling in Reference re Greenhouse Gas Pollution Pricing Act that the GHGPPA was constitutional. [10]
In December 2020, the federal government released an updated plan with a $15 /t per year increase in the carbon pricing, reaching $95 /t in 2025 and $170 /t in 2030. [55] [56]
In October 2023 Prime Minister Justin Trudeau announced that the federal government was granting a carbon exemption on heating oil from 2023 through 2027 because the price of heating oil increased by 75% in 2022. Natural gas, which is used by households that are better off, now costs one-half to one-quarter the cost of heating oil. [57] There are only about 3% of Canadians who still use heating oil, and they are mainly located in the Atlantic provinces. They are also mainly low-income and rural, so the exemption was intended for this demographic. Opposition critics say that this move is politically motivated, as the Liberal government has more Members of Parliament in the Atlantic provinces. Environmentalists criticize the decision, saying that it undermines the carbon pricing scheme. [57]
By 2018, Quebec (2007), British Columbia (2008), Alberta, Ontario, Manitoba and Nova Scotia had carbon-pricing policies in place. [23] By 2017, Metro Vancouver was "exploring road fares and other fee-based mechanisms to address traffic congestion". [23] Ontario cancelled their cap and trade system in 2018. The outlines of a new climate plan for Ontario, which did not include any carbon pricing system, was unveiled in November 2018. [44]
Manitoba, Ontario, Saskatchewan, and New Brunswick refused to impose their own emissions pricing so the federal pricing came into effect on April 1. Residents of the four provinces pay more for gasoline and heating fuel. The "starting rate added 4.4 cents to the price of a litre of gas, about four cents to a cubic metre of natural gas". The price of propane, butane and aviation fuel will also increase. Residents will receive rebates on their income tax returns. Amounts will vary with each province. [58] In Saskatchewan for example, a family of four will receive $609 in 2019. [59]
The Government of British Columbia introduced a carbon tax in 2008. [60]
British Columbia was the first Canadian province to join the Western Climate Initiative (WCI), which was established in February 2007 by the governors of Arizona, California, New Mexico, Oregon, and Washington to reduce greenhouse gas emissions. The WCI became an international partnership when BC joined. [61] By 2011, BC's preference was for its existing carbon tax as opposed to the cap and trade proposed by the WCI. [62]
In 2013, Angel Gurría, then-Secretary-General of the Organisation for Economic Co-operation and Development (OECD), said that the "implementation of British Columbia's carbon tax is as near as we have to a textbook case, with wide coverage across sectors and a steady increase in the rate" over a period of five years. [63] [64]
According to a November 2015 article in The Atlantic , after British Columbia's provincial government introduced a carbon tax in 2008, greenhouse emissions were reduced, "fossil fuel use in British Columbia [had fallen] by 16 percent, as compared to a 3 percent increase in the rest of Canada, and its economy ... outperformed the rest of the country." This proved that carbon tax benefits were "no longer theoretical" and that they did not hinder economic growth. [60]
Quebec participates in an international emissions trading scheme with the US state of California.
In June 2007, Quebec implemented a carbon tax on energy distributors, producers, and refiners, the first Canadian province to do so. When announcing the new tax, Quebec Natural Resources Minister Claude Béchard said that industries would absorb the tax, which would total CA$200 million in revenue annually, instead of passing on the cost to consumers. [12] Of the 50 companies affected, the hardest hit would be oil companies, who would pay "about CA$69 million a year for gasoline, CA$36 million for diesel fuel, and CA$43 million for heating oil". [12] The tax would also affect natural gas distributors who would pay about CA$39 million and electricity distributor Hydro-Québec who would pay CA$4.5 million for its Sorel-Tracy, Quebec-based thermal energy plant. [12]
The Premier of Saskatchewan, Scott Moe, has spoken emphatically against the GHGPPA. [49] The Government of Saskatchewan released a report entitled "Prairie Resilience: A Made-in-Saskatchewan Climate Change Strategy" which he said in an October 23, 2018 interview with CBC's Vassy Kapelos, has been accepted by the federal government as meeting GHGPPA requirements. [65] The federal government assured residents of Saskatchewan that "all direct proceeds collected in Saskatchewan under the federal pollution pricing backstop system" would be paid "through direct payments to individuals and families and investments to reduce emissions, save money, and create jobs". For example, a family of four would "receive $609 in 2019". [59]
In July 2007, Alberta enacted the Specified Gas Emitters Regulation, Alta. Reg. 139/2007, [66] (SGER). This tax [67] [68] exacts a $15/tonne contribution by companies that emit more than 100,000 tonnes of greenhouse gas annually that do not reduce their CO2 emissions per barrel by 12 percent, or buy an offset. [69] [70] [71] In January 2016, the contribution required by large emitters increased to $20/tonne. [72] The tax fell heavily on oil companies and coal-fired electricity plants. It was intended to encourage companies to lower emissions while fostering new technology. The plan only covered the largest emitters, who produced 70% of Alberta's emissions. [71] Critics charged that the smallest energy producers are often the most casual about emissions and pollution. [71] The carbon tax is currently $20 per tonne. [73] Because Alberta's economy is dependent on oil extraction, the majority of Albertans opposed a nationwide carbon tax. Alberta also opposed a national cap and trade system. The local tax retains the proceeds within Alberta. [74]
On 23 November 2015, the Alberta government announced a carbon tax scheme similar to British Columbia's in that it would apply to the entire economy. All businesses and residents paid tax based upon equivalent emissions, including the burning of wood and biofuels. The tax came into force in 2017 at $20 per tonne.
On 4 June 2019 a carbon tax repeal bill was enacted.[ citation needed ]
In November 2015 Premier Rachel Notley and Alberta Environment Minister Shannon Phillips announced Alberta's carbon tax. [20]
In his Maclean's 2015 article, economist Trevor Tombe wrote that "[p]ricing carbon is one of the most sensible policy prescriptions to address greenhouse gas emissions". [20] Tombe listed the advantages and disadvantages. The carbon tax provides a "new source of revenue for the government". [20] The tax is a "far more efficient means of lowering greenhouse gas emissions than regulatory approaches." [20] As part of the process of researching and implementing the carbon tax, the Alberta government worked with a panel chaired by University of Alberta economist Andrew Leach to study a carbon tax based on "sensible, evidence-based policy advice", which Tombe described as "a model for other jurisdictions". [20] The price of the carbon tax began at CA$20 a tonne in 2017, rose to CA$30 a ton in 2018 and was tied to a 2% increase based on rising inflation, which Tombe considered to be "reasonable". [20] Tombe estimated the impact of the carbon tax on the 3 "most carbon-intensive consumer purchases". He estimated an increase in the price of gasoline of c. 6.7 cents per litre when the CA$30 a tonne tax came into effect. Natural gas prices would increase by about $1.50 /GJ . [20] "[L]ow to middle-income households" would "receive compensation". [20]
Premier Kenney joined like-minded premiers, including Doug Ford of Ontario, Scott Moe of Saskatchewan and Brian Pallister of Manitoba, in a lawsuit against the federal Liberal government on the carbon tax. The Court of Appeal of Alberta ruled against the federal government. [75] This decision was later overturned when the Supreme Court of Canada ruled that the federal carbon tax was constitutional. [76]
The first piece of legislation introduced by the newly-elected Premier of Alberta, Jason Kenney, was Bill 1: An Act to Repeal the Carbon Tax. [77] The bill repeals the provincial carbon tax, but it will be replaced by the federal carbon levy. [78]
The Ontario Climate Change Mitigation and Low-Carbon Economy Act, 2016 passed by the government of Kathleen Wynne established a standard cap and trade system which integrates with the Western Climate Initiative (WCI) providing access to an "even greater market to buy and sell the most cost effective carbon credits." [79] [80] Gary Goodwin called it the "best and most integrated solution to the problem of emissions." [79]
In September 2017, the Wynne government of Ontario joined the Western Climate Initiative (WCI), which was established in February 2007 by the governors of Arizona, California, New Mexico, Oregon, and Washington to reduce greenhouse gas emissions. *April 24, 2007: British Columbia joined with the five western states, turning the WCI into an international partnership [61] with the goal of developing a multi-sector, market-based program to reduce greenhouse gas emissions.and link its cap-and-trade system with Quebec's and California's in January 2018. This harmonized carbon market will be the second largest in the world, trailing only the EU Emissions Trading System (ETS) and will feature joint permit auctions. Because it allows for permit trading between jurisdictions, linked cap-and-trade systems achieve lower-cost mitigation actions across jurisdictions than an unlinked system. [61]
In October 2018, the newly-elected Progressive Conservative government under premier Doug Ford, cancelled the previous cap and trade system as he had promised in his electoral campaign. [81] In November, the Ontario government unveiled a climate plan which did "not include any kind of price on emissions". [82]
In April 2019, the provincial government introduced the Federal Carbon Tax Transparency Act as part of its budget, which makes it mandatory for all gas stations (excluding those situated on Indian reserves) to display government-commissioned decals on their pumps informing customers of the claimed "cost" of the carbon tax—increasing gas prices by 4.4 cents per-litre, and increasing gas prices by up to 11 cents per-litre by 2022. The decals contain a URL for a page on the Ontario web site that explains its positions on the tax, but the decals do not mention the rebate programs. Gas stations may be inspected at "all reasonable times" for compliance with the Act, and owners may be fined CA$500 for their first violation, and CA$1,000 per-day if they persist. The fines increase to $5,000 and 10,000 for corporations. [83] The act became effective August 30, 2019. [84] [85]
Federal Minister of Environment and Climate Change Catherine McKenna accused the Ford government of "wasting taxpayers' dollars on misleading stickers" which failed to acknowledge the rebate programs "or the cost of inaction on climate change". [83] The Act was criticized by the Ontario NDP, with MPP Peter Tabuns accusing Ford of "threatening private business owners with massive fines for failing to post Conservative Party advertisement[s]". [85] [86] Fellow MPP Taras Natyshak issued a letter to the Chief Electoral Officer, alleging that the decals should be considered partisan campaign advertising under the Canada Elections Act due to the then-upcoming federal election. The government defended the decals and Act, considering it "transparency" that reminds Ontario residents of the "costs" of the Liberal carbon tax. [86] [85] Green Party of Ontario leader Mike Schreiner accused Ford of "forcing businesses to be complicit in his anti-climate misinformation campaign", and invited gas stations to help him inform the public that "climate change will cost us more" with his own version of the decal. [87]
The Canadian Civil Liberties Association took the Ontario government to court over the mandatory stickers, arguing the messages were “a form of compelled political expression.” In September 2020, the Ontario Superior Court of Justice sided with CCLA, ruling that Ford's mandatory gas-pump decals attacking federal carbon-pricing measures are unconstitutional and violated business owners' freedom of expression. [88]
The Government of the Northwest Territories implemented a carbon price that took effect in September 2019. [89]
Most aspects of the federal government's Output Based Pricing System (OBPS) announced in December 2018, "which targets greenhouse gas emissions from large, industrial facilities", are similar to Alberta's Carbon Competitiveness Incentive Regulation (CCIR) which was also similar to Alberta's 2007 Specified Gas Emitters Regulation (SGER). [90] The three programs had a "price on carbon emissions" and a "system of allocations through which firms receive some number of emissions credits for free." [90] The OBPS rules apply to large facilities in Ontario, New Brunswick, Manitoba, Prince Edward Island, Saskatchewan, Yukon and Nunavut—the "provinces covered by the federal backstop policy." [90] The OBPS covers a "relatively small share of emissions in the provinces it affects." [90] Most emissions come from smaller emitters which "will be covered in large part by the carbon price". A University of Alberta professor of economics named Andrew Leach blogged that "Much of the coverage of this system has framed the OBPS as an exemption from emissions pricing for large emitters, but that hides the importance of the two, linked programs – the carbon price and the output-based allocation of credits." [90]
In the spring of 2018, the federal government had "proposed that all fossil fuel-burning generating stations be treated the same with the first 420 tonnes of greenhouse gases per gigawatt hour of electricity produced exempt from carbon taxes and everything above that subject to a charge." [91]
CBC reported in October 2018 that "natural gas stations face carbon taxes on emissions above 370 tonnes, oil on emissions above 550 tonnes and coal above 800 tonnes, a major concession to coal plants." [91] [Notes 1]
In June 2018, John Ivison wrote in the National Post that the Conservative Party were attempting to make the carbon tax "the single issue" of the 2019 federal election campaign. [8] He argued that Andrew Scheer's leadership had interpreted Doug Ford's election as premier of Ontario as "an explicit rejection of the carbon tax". [8]
The federal carbon pricing system in Canada has been the subject of significant debate and controversy. [92] [93] [94] [95] Since 2016, the Mining Association of Canada, has supported carbon pricing as a way of responding to climate change. [96] [97] A 2024 Ecological Economics journal literature review based on public communications on carbon pricing of the 100 largest oil and gas companies said that 54% of those oil and gas companies with a stated policy on carbon taxes express support for such measures, with the percentage rising to 78% among the top 50 companies. [98]
The debate around carbon pricing intensified in early February 2023, with a polar vortex causing record-breaking cold weather. Pierre Poilievre, who has been the leader of the Conservative Party of Canada and the leader of the Official Opposition since 2022, blamed the dramatic increase in heating bills on the carbon price, commonly referred to as the "carbon tax," on his social media accounts, which reached half a million viewers. [99] In June 2023, Poilievre launched his 'Axe the Tax' campaign in the Atlantic provinces, [100] just days before the region faced increased gas prices when carbon pricing came into force in that region on 1 July 2023, following four years of an exemption. [101]
Poilievre pledged in July 2023, that he would repeal the carbon tax if the Conservatives form government under him in the 2025 federal election. [102]
In March 2024, Poilievre called for a non-confidence vote in the federal government in the House of Commons to prevent the 1 April increase in the carbon price. Prior to the April 1 carbon tax increase, Poilievre crossed the country with his 'Axe the Tax' rallies. [103]
With the backing of both the Bloc and the NDP, the government survived. [95] [104]
A group, called Nationwide Protest Against Carbon Tax, organized protests that took place at about fifteen locations across Canada, with dozens of partipants at some locations. Their goal was to slow traffic on major highways and at borders to protest the increase of the federal consumer carbon price of $15-per-tonne. [105]
By 2 April 2024, two hundred economists had signed an open letter refuting Poilievre's stance on carbon pricing. [95] [106]
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A carbon tax is a tax levied on the carbon emissions from producing goods and services. Carbon taxes are intended to make visible the hidden social costs of carbon emissions. They are designed to reduce greenhouse gas emissions by essentially increasing the price of fossil fuels. This both decreases demand for goods and services that produce high emissions and incentivizes making them less carbon-intensive. When a fossil fuel such as coal, petroleum, or natural gas is burned, most or all of its carbon is converted to CO2. Greenhouse gas emissions cause climate change. This negative externality can be reduced by taxing carbon content at any point in the product cycle.
Environment and Climate Change Canada is the department of the Government of Canada responsible for coordinating environmental policies and programs, as well as preserving and enhancing the natural environment and renewable resources. It is also colloquially known by its former name, Environment Canada.
The Ministry of the Environment, Conservation and Parks is an Ontario government ministry responsible for protecting and improving the quality of the environment in the Canadian province of Ontario, as well as coordinating Ontario's actions on climate change. This includes administration of government programs, such as Ontario's Drive Clean and Clean Water Act. The ministry headquarters are located inside the Ontario Government Buildings.
The Canadian Association of Petroleum Producers (CAPP), with its head office in Calgary, Alberta, is a lobby group that represents the upstream Canadian oil and natural gas industry. CAPP's members produce "90% of Canada's natural gas and crude oil" and "are an important part of a national industry with revenues of about $100 billion-a-year ."
Western Climate Initiative, Inc. (WCI) is a 501(c)(3) non-profit corporation which administers the shared emissions trading market between the American state of California and the Canadian province of Quebec as well as separately administering the individual emissions trading systems in the Canadian province of Nova Scotia and American state of Washington. It also provides administrative, technical and infrastructure services to support the implementation of cap-and-trade programs in other North American jurisdictions. The organization was originally founded in February 2007 by the governors of five western states with the goal of developing a multi-sector, market-based program to reduce greenhouse gas emissions; it was incorporated in its current form in 2011.
Canada has access to all main sources of energy including oil and gas, coal, hydropower, biomass, solar, geothermal, wind, marine and nuclear. It is the world's second largest producer of uranium, third largest producer of hydro-electricity, fourth largest natural gas producer, and the fifth largest producer of crude oil. In 2006, only Russia, the People's Republic of China, the United States and Saudi Arabia produce more total energy than Canada.
The Climate Registry (TCR) is a non-profit organization governed by U.S. states and Canadian provinces and territories. TCR designs and operates voluntary and compliance greenhouse gas (GHG) reporting programs globally, and assists organizations in measuring, reporting and verifying the carbon in their operations in order to manage and reduce it. TCR also consults with governments nationally and internationally on all aspects of GHG measurement, reporting, and verification.
The United States produced 5.2 billion metric tons of carbon dioxide equivalent greenhouse gas (GHG) emissions in 2020, the second largest in the world after greenhouse gas emissions by China and among the countries with the highest greenhouse gas emissions per person. In 2019 China is estimated to have emitted 27% of world GHG, followed by the United States with 11%, then India with 6.6%. In total the United States has emitted a quarter of world GHG, more than any other country. Annual emissions are over 15 tons per person and, amongst the top eight emitters, is the highest country by greenhouse gas emissions per person.
The environmental policy of the Stephen Harper government was implemented when Stephen Harper was the Prime Minister of Canada from 2006 to 2015, under two minority governments until 2011 when the Conservative Party of Canada won a majority in the 2011 Canadian federal election. During the term of Stephen Harper, Canada's greenhouse gas emissions decreased from 730 to 723 Mt of carbon dioxide equivalent. In contrast, during the period from 1993 until 2006, under various Liberal governments, Canada's greenhouse gas emissions increased 617 to 730 Mt of carbon dioxide equivalent.
The electricity policy of Alberta, enacted through several agencies, is to create an electricity sector with a competitive market that attracts investors, while providing consumers with reliable and affordable electricity, as well as reducing harmful pollution to protect the environment and the health of Albertans, according to their 2022 website.
Climate change is greatly impacting Canada's environment and landscapes. Extreme weather has become more frequent and severe because of the continued release of greenhouse gases into the atmosphere. The number of climate change–related events, such as the 2021 British Columbia Floods and an increasing number of forest fires, has become an increasing concern over time. Canada's annual average temperature over land warmed by 1.7 degrees Celsius between 1948 and 2016. The rate of warming is highest in Canada's north, the Prairies, and northern British Columbia. The country's precipitation has increased in recent years and wildfires expanded from seasonal events to year-round threats.
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A carbon fee and dividend or climate income is a system to reduce greenhouse gas emissions and address climate change. The system imposes a carbon tax on the sale of fossil fuels, and then distributes the revenue of this tax over the entire population as a monthly income or regular payment.
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The Energy East pipeline was a proposed oil pipeline in Canada. It would have delivered diluted bitumen from Western Canada and North Western United States to Eastern Canada, from receipt points in Alberta, Saskatchewan and North Dakota to refineries and port terminals in New Brunswick and possibly Quebec. The TC PipeLines project would have converted about 3,000 kilometres (1,900 mi) of natural gas pipeline, which currently carries natural gas from Alberta to the Ontario-Quebec border, to diluted bitumen transportation. New pipeline, pump stations, and tank facilities also would have been constructed. The CA$12 billion pipeline would have been the longest in North America when complete.
The British Columbia carbon tax has been in place since 2008. It is a British Columbia policy that adds additional carbon taxes to fossil fuels burned for transportation, home heating, and electricity and reduces personal income taxes and corporate taxes by a roughly equal amount. The carbon tax is collected at the point of retail consumption.
Green economy policies in Canada are policies that contribute to transitioning the Canadian economy to a more environmentally sustainable one. The green economy can be defined as an economy, "that results in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities." Aspects of a green economy would include stable growth in income and employment that is driven by private and public investment into policies and actions that reduce carbon emissions, pollution and prevent the loss of biodiversity.
The Canadian province of Alberta faces a number of environmental issues related to natural resource extraction—including oil and gas industry with its oil sands—endangered species, melting glaciers in banff, floods and droughts, wildfires, and global climate change. While the oil and gas industries generates substantial economic wealth, the Athabasca oil sands, which are situated almost entirely in Alberta, are the "fourth most carbon intensive on the planet behind Algeria, Venezuela and Cameroon" according to an August 8, 2018 article in the American Association for the Advancement of Science's journal Science. This article details some of the environmental issues including past ecological disasters in Alberta and describes some of the efforts at the municipal, provincial and federal level to mitigate the risks and impacts.
The Greenhouse Gas Pollution Pricing Act is a Canadian federal law establishing a set of minimum national standards for carbon pricing in Canada to meet emission reduction targets under the Paris Agreement. It was passed as Part 5 of the Budget Implementation Act, 2018, No. 1 – an omnibus budget bill – during the 42nd Parliament of Canada. The law came into force immediately upon receiving royal assent on June 21, 2018.
In Reference re Greenhouse Gas Pollution Pricing Act 2021 SCC 11, the Supreme Court of Canada ruled on 25 March 2021 that the federal carbon pricing law is constitutional.
Market-based instruments are regulations that encourage behavior through market signals rather than through explicit directives regarding pollution control levels or methods
Vast reserves of tar sands oil in Alberta have meant Canada has maintained a hard line throughout the climate negotiations.
In 2017, Alberta experienced the "fastest expansion among the 10 provinces" with its GDP growing by 4.9 percent, representing a recovery after falling output in 2015 and 2016 when oil prices collapsed. In 2017, British Columbia posted its strongest pace of growth since 2008
Since Sweden introduced its carbon tax in 1991, an additional nine OECD countries have followed suit. We have learned a lot from these experiences on how to introduce carbon taxes. For example, introducing the taxes incrementally over time can allow households and businesses to make smooth, efficient adjustments.